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INTRODUCTION
Set up by Ryan family in 1985 1975- Formation of Guinness Peat Aviation which became the largest aircraft leasing company in the world. Innovative step by the founder Tony Ryan- Leasing of excess capacity to other airlines Leasing provided revenues to launch airline. First route : Waterford Gatewick , 14 seater aircraft , done well Identified potential for business, yet to decide.
EUROPEAN AIRLINES
Post WW1, Commercial Airlines sprang up Small Airlines Converted to National Flag Carriers(Tail of the plane) Colonial aims fulfilled by respective Govts. (Ex. Imperial Airways) International Routes focused upon, intra country service was sparse. Domestic fares kept high to subsidize international flights. WW2- A great leap forward in aviation. Bilateral, multilateral agreements did a task of protectionism.
EUROPEAN AIRLINEScontd.
IATA( International Air Traffic Association)-fixed fares. Pooling agreement in Europe (Ex. Route b/w France and Italy given to Air France and Alitalia)
Revenue and capacity divided in an agreed upon manner by the Flag Carriers. Restrictions also involved compulsory operations (begin or end) in the domestic soil; New entrants discouraged.
Profit scaled up, although deregulation scenario slowed down during the BAs turnaround. 1986- BA had the most extensive network 145 destinations, 68 countries; Almost 80% passengers passed through Heathrow Airport. Invested 700 million in the purchase of 55 new aircrafts; Tickets sold over telephone, 171 retail shops, 49000 independent travel agents.
AER LINGUSOUTLOOK Govt and Private parties formed Aer Lingus Britain govt 40% stake in Aer Lingus in 1946 Initial route Great Britain and Ireland 1930s & 40s Losses between 20% and 100% of the revenue Monopoly of Aer Lingus over Irish Sea.
AER LINGUSOUTLOOK
Air Lingus experienced modest operating profit within air transportation and non airlines business had performed well.
Target large Irish immigrant population working in England since they were suffering from long 9 hour journey and flights were unaffordable. This target segmentation clearly identified their niche market.
This strategy can stimulate demand and build brand power. Can take away traffic/business from ferries and other transportation companies
Development of IT technologies to enable better capacity utilization and scheduling Improvements in aircraft reliability, maintenance requirements and fuel economy to support low cost.
Low cost booking mechanism through call centers and internet although these means were new concept yet.
Development of cheaper complementary transportation to/from remote airports to points of general interest.
RECOMMENDATION
RYANAIR shall opt to launch Dublin London route. However, challenging is not only to compete with British airways, Aer Lingus and other airlines but also to sustain on the core business driver, a low cost structure. Moreover, yearning for success drives organization towards innovative strategies to operate business rather than in a traditional way.